Country Style Donut Shops

Two Country Style Donut stores are shutting down, there’s all sorts of legal wrangling going on between the head office and the franchisees.

CBC Sudbury
September 22, 2000

Country Style Donut Shops
CBC Radio Transcript

SHERRY HUFF: Two Country Style Donut store owners in Northern Ontario are in the midst of a legal battle with the company’s head office. The company claims it didn’t do anything wrong, but the franchisees says they were given inaccurate profit statements that made it impossible to stay afloat. The CBC’s Anastasia Kozelko reports

ANASTASIA KOZELKO: Vicky Bunyak took over a Country Style Donut store in Sudbury five years ago. Bunyak says ever since she signed the contract she’s been in debt. She says in her Statement of Defence that it was impossible to meet the company’s profit projections.

VICKY BUNYAK: I’ve had to get like another job and work weekends, and you know I lost all my RSPs. I had to take them out put them into here, and you don’t even want to answer the phone because you’re afraid it’s going to be someone that you owe money to.

KOZELKO: Bunyak says head office has told her to be out of the store today. Michael Casconi is the lawyer for Country Style head office. He says the company provides their franchisees with more than enough information, but Bunyak isn’t alone in her fight. Stores in Northern Ontario and Ottawa have filed similar lawsuits. Kyle Hoddy owns a closed down Country Style Donut Store in Espanola and is embroiled in a similar battle. He says head office wasn’t wiling to help out once his business started failing.

KYLE HODDY: They always have their same old story where, you know, it’s not our fault it’s bad management. How can it be bad management when my store was evaluated and I’ve always passed evaluation?

KOZELKO: Hoddy says the case is likely to continue in Court for at lease another year. Anastasia Kozelko, CBC News, Sudbury.

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Risks: Uncharacteristically shy with media requests, Raining litigation, False earnings claims, Franchisor insolvency, intentional, 20 terminations turn into 200, Termination of franchisee, mass, Private Members’ Bill, Rent increase, Must buy only through franchisor (tied buying), Doughnut, Lease controlled by franchisor, Industry in disrepute, Public perception of sleaze and greed, Trustee/consultant does mass terminations under insolvency to flip to new owner, Franchisees are pawns in insolvency flip, Opposition to fake franchisor insolvency and ownership flip, Blame the franchisee, False earnings claims, Canada, 20000922 CSD Shops

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